DEFINITION of 'Liberty Reserve'

A Costa Rican company that allows people to send and receive secure payments without revealing their account numbers or identities. Liberty Reserves (LRs) are also the name of the company's electronic currency, which is backed by either U.S. dollars or by euros. Types of entities that accept LRs include individuals, forex, shopping, finance, entertainment and internet services.

BREAKING DOWN 'Liberty Reserve'

Customers use an online exchange service to add or withdraw funds from their accounts -funds cannot be added or withdrawn directly from a customer's bank account. It is also possible to convert other types of electronic currency into LRs. Transfer fees are 1% or $2.99, whichever is less. Liberty Reserve's competitors include RBK Money, AlertPay and WebMoney.

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